accounting error

An accounting error is a non-fraudulent discrepancy in financial documentation. The term is used in financial reporting.

Types of accounting errors include:

Error of omission -- a transaction that is not recorded.

Error of commission -- a transaction that is calculated incorrectly. One example of an error of commission is subtracting a figure that should have been added.

Error of principle -- a transaction that is not in accordance with generally accepted accounting principles ( GAAP). One example of an accounting error of principle is an expenditure that is placed in an inappropriate category.

If a company discovers that an accounting error significantly affected a previous report, it usually issues a restatement of the original release.

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